Organizational Readiness : Project Risk Management Essay

Risk management is a process for identifying, assessing and prioritizing risks of different kinds. Once the risks are identified, the risk manager will create a plan to minimize or eliminate the impact of negative events. A variety of strategies is available, depending on the type of risk and the type of business. There are a number of risk management standards including those developed by the Project Management Institute the International Organization for Standardization the National Institute of Science and Technology and actuarial societies. Organizations uses different strategies in proper management of future events such as risk assumption, risk avoidance,

Risk refers to a likelihood, probability, a chance that a loss may occur in a given organization. Most of the times, there is a high risk when there is vulnerability. In this case, vulnerability refers to a weakness that the organization has. Risk assessment refers to the process of identification of potential hazards and proper analysis of the expected losses if those hazards occur (Homeland Security, n.d.). Risk assessment as a way of profiling risk according to impact to the organization. Some organizations have business impact analysis exercises geared towards determination of potential hazards based risk assessment approaches. Organizations’ risk differ depending on the size and the type of business they are doing. The disparity in organizations’ risk call for different adaptation of risk assessment approaches. Even with the disparities of the businesses, proper risk management not only ranks the risks according to the seriousness but also identifies the best methods to control risks in an organization.

Critical success factors and critical success process are the areas of the project that are absolutely essential to its success. By identifying and communicating with these two concepts, it will help ensure the project is well focused and avoid wasting effort and resources on less important areas.

Risk management is an ongoing process that must continue through the life of a project. It includes processes for risk management planning, identification, analysis, monitoring, and control. These processes need to be reviewed throughout the project’s lifecycle as new risks arise throughout the implementation of the project. It is the objective of risk management to decrease the probability and impact of events adverse to the project. On the other hand, any event that could have a positive impact should be exploited.

Risk management is the process of identifying, evaluating and prioritization of risks to minimize the hazards. Risk management is also part of planning for all levels of business. Risk management included all type of risks. The risk management helps all parties make appropriate decision according to the level of risk. Basically, risk management can be defined as manage the risk.

In all levels of an association, risk management is an essential segment of great administration and choice (Berg, HP 2010). It is really important for a company like Disney to manage their risk that are occurring for their expansion project. Where according to Berg, HP (2010) by having risk management will help in focusing the setting and portion of breaking points of the company, and it will also focus on mitigating the risk, endorse all activities that leads to innovation so the company will achieve good results at the end of the decision making. On the other hand, by managing risk company can improve their efficiency and effectiveness on making decision and using resources and lower down their cost of the capital (Ho, TSY & Lee, SB 2003).

Risk management is the term applied to a logical and systematic method of establishing the context, identifying, analyzing, evaluating, treating, monitoring and communicating risks associated with any activity, function or process in a way that will enable organizations to minimize losses and maximize opportunities. (Lecture notes)Risk Management is also described as 'all the things you need to do to make the future sufficiently certain'. (The NZ Society for Risk Management, 2001)

PRM have been a part of successful projects but the problem is, in which proportion it contributes in success of project, In Pakistan

In addition to reading the course notes, I also looked at what APMBOK (Association for Project Management, Body of Knowledge 2009, 6th Edition, UK) said about this critical area of Project Management. Additionally, I researched what my Company does to maximize their effectiveness in this area by studying their attitude towards Risk Management throughout the complete life-cycle of a project, and finally I drew from my own knowledge and experiences in this critical area.

Risk management is the most important part of any organization to face the risks that might arise when a new project started. It should be a first concern when the decision is being made. Risk management is the practice of looking at the exposure to risk and deciding how to best handle that exposure. The idea behind risk management is to decide if the benefit outweighs the risk. This process will help you to identify risks that might normally be overlooked so when things come up, they do not surprise you by having a plan in place on how to solve them.

The completion of any project depends on the execution of various parameters mostly set at the beginning of the project. In order to complete the project to satisfactory levels, the project must be completed within the stipulated timelines, fall within the approximate budget and be of the required quality standards. However, most of the projects are affected by adverse changes and unforeseen events that occur during the execution period. Research shows that the magnitude of change is dependent on the size of the project, with large projects experiencing more uncertainties due to several factors including; planning and design complexity, interest groups having deferring opinions, resource availability, Economic and political climate and statutory regulations, which may necessitate change of plan. Most of the uncertainties are known to occur in the concept phase and if not intervened, they may affect the entire project. The burden falls on the management of such risk as some managers choose to ignore the uncertainties since they call for additional costs. Other inherent risks may go unnoticed and therefore remain unsolved,

In recent changes a few things have become important for companies. The first is connecting risk to business performance. Companies need to establish processes and mechanisms which link risk to business performance. Risk management under the present scenario also includes measures like sophisticated measurement, modeling and analytics for anticipating risks as well as integrating risk management capabilities with the organizational structure and across business units. Similarly, developing relationships with regulatory agencies as well as supervising regulation and compliance has also become important. (Butcher, 2011) Apart from all, detailed training on risk management and infusing risk awareness across the organization is also important. In short, integrating the risk function to include it in strategic planning has become crucial to gaining sustainable advantage.

One well accepted description of risk management is the following: risk management is a systematic approach to setting the best course of action under uncertainty by identifying, assessing, understanding, acting on and communicating risk issues. In order to apply risk management effectively, it is vital that a risk management culture be developed. The risk management culture supports the overall vision, mission and objectives of an organization. Limits and boundaries are established and communicated concerning what are acceptable risk practices and outcomes. Since risk management is directed at uncertainty related to future events and outcomes, it is

Risk Management—Contributing to frameworks and practices for identifying, measuring, managing and reporting risks to the achievement of the objectives of the organization.

Risk management is beneficial to maintain the stability of the enterprise production and operation. An efficient risk management will